Operational Crm 15.10 (1) [302157]

[anonimizat]: Operational CRM & [anonimizat]: Prof. Univ. IRINA PUGNA

Author: ANDREEA SOCOL

Acknowledgment

I want to thank to all the persons who supported and trusted me: [anonimizat] I worked so hard in the same time as I [anonimizat] I also want to thank to all the people I met here in the MBA program and to my work colleagues that I [anonimizat] I called my family for two years.

[anonimizat] – Steve Jobs.

The world is changing. [anonimizat]. [anonimizat], we must accept this rhythm and adapt constantly. Speed in embracing change can lead either to success or failure. Banks are under pressure at this moment.

I firmly believe that banking industry is a [anonimizat] I [anonimizat], [anonimizat], according to customer need. We have to keep pace with customers needs. Because we have a [anonimizat]. Because digital transformation has also a disruptive effect on business models. [anonimizat], whether we discuss about internal or external client.

Let’s [anonimizat]. [anonimizat] – even ignorance sometimes. I personally do not believe in too big to fail. No matter the size of a company, we have to build better systems every day and every month. Otherwise the competitor will come over. [anonimizat], will lead to the lack of decisions.

Fortunately, banking industry can answer the question What do I need extra in order to succeed? by first combining digital technology with a clever financing.

This project analyses the company I worked for two years and a [anonimizat] – [anonimizat] a traditional banking company to a [anonimizat], [anonimizat].

Operationl CRM implementation and use was one of the four clear and important initiatives in 2017 [anonimizat], as we should always take into consideration that a change for the Company is almost always a [anonimizat].

[anonimizat] this industry, for One Bank is vital to have a strategy for surviving in a very competitive environment.

2020 One Bank Ambition – One Bank intends to become the most respected bank in Romania:

Banking for everybody

Access to permanent and secure financing

Long term advisor, life advisor

Genuine respect for customers

Customer acquisition is only the very first step in an extended journey for both customer and company’s CEO One Bank: It is in our power to support the communities in which we work.

Chapter 1. General description of One Group

Activity Object

One Bank was founded more than 150 years ago as a savings financial institution and went public in 1997. The main a strategy was to expand its retail business into CEE. Since then, the group – namely One Group – became one of the largest bank in the Eastern part of EU taking consideration the assets which reached 101 bln EUR bu the end of 2018, and the total number of clients. This was also the result of additional acquisitions and of the organic growth.

The Group has an extensive presence especially in Central and Eastern Europe – Czech Republic, Austria, Croatia, Hungary, Slovakia, Romania and Serbia, with almost 16 mln customers, 47 ths employees, more than 2.5 ths branches, with 237 bln assets and 1.8 bln net profit, as per end of 2018.

One Group – Business Segments

My own representation based on One Bank organization chart, 2019

One Group – Geographical Segmentation

My own representation based on One Bank organization chart, 2019

OUTLOOK 2019

One Group expects revenues to grow more than costs, taking into consideration the great development in the CEE region, with the again of strong home demand, with the rising of the current salaries, low unemployment, and also health public budget.

Based on this assumption, the Return on Tangible Equity for 2019 is targeted at min

11 %.

My own representation based on Fact sheet march 2019, One Group

Macroeconomic overview

The CEE economies registered a financial growth in Q4 2018, despite the signs of a possible slowdown. Romania, Slovenia and Czech Republic registered a growth up to 4% in the Q4. Slovakia and Croatia posted a slowdown. It is clear that a slowdown is inevitable for these countries hat accelerated very much in 2018, as home demand was booming (due to wage increase and employment growth). CEE location, per total, increased by 3% this year.

Strategy

The Group that One Bank belongs is still leading in terms of retail and corporate in the eastern part of the European Union. For this, the group supports its customers – whether retail, SME or PS customers, by offering tremendous financial advice and solutions.

The group’s business is an important contributor to economic and financial growth and stability, and of course to prosperity in the region. In all of its core markets, the financial institution is focused on providing the best services to the customers, whether potential or already existing ones.

And digital innovations plays a role which is very important. However, market leadership is not an end in itself. It has added value when it goes hand in hand with positive economies.

All these being said, we should be aware at the end that the main target of the business is not only to be profitably, but also to be corporate responsible to its customers, stakeholders, employees, towards the society and even environment.

Please find below some aspects which are part of the strategy.

Long-standing tradition in customer facing

The Group’s core activities include not only best advisory services and any other required support for its customers not only on financing purpose, but also on investment or swap/hedging activities and capital markets.

As mentioned in the very beginning, the group has been active for more than 150 years, especially in retail. This is the segment which generates most of the income The retail business represents the strength of the financial institution and main priority when creating new products (if we think of George ) in order to reshape the customer experience, becoming 100% digital, paperless.

The most important objective of the bank is to offer better product in order to build and maintain strong relationships with the customers.

Core markets today

When One Group went public as mentioned in the first chapter, it first defined its target region as consisting of Austria and the part of CEE – as it had realistic chanches to join the European Union, in order to benefit from the important growth possibilities in this area. Moreover, the Group acquired other financial institutions starting with 1990s onwards. This part of Europe is still the supplier of the long-term growth perspectives.

The core markets in which the Group is presented, are: Austria, Slovakia, the Czech Republic, Romania, Hungary and Croatia – all being members of the European Union. It also has considerable market positions in these countries. In addition to its core markets, One Group also has banking participations in Bosnia and Herzegovina, North Macedonia, Moldova, Slovenia and Montenegro.

Growing importance of financial innovation mixed with disruptive technologies

The pace of digital transformation has accelerated considerably and therefore, customer behaviour and expectations towards financial products and other offerings have also changed alot.

The digital banking continues to gain importance and will become soon essential for the company success in the long term. Domestic and cross-border teams work together to come up with new and helpful solutions.

The digital ecosystem becomes the main strategy. Clients can access now customized and tailored products from One Group and also third-party suppliers through application programming interfaces (APIs).

The digital platform George was implemented four years ago, in Austria. Starting 2018, it has been also running in the Czech Republic, Slovakia and Romania, and it will soon be launched in all markets. The catalogue of products and services is constantly upgraded.

Various sales and communication channels are being integrated. It is up to customers now when and where they do their banking operations. Call Centers will become the main identification device in order to finalize the KYC and the traditional approach is left behind, as they will not offer anymore just advice.

Focus on sustainability and profitability!

It is very clear that acting responsibly is an important milestone in the long-term life of any business. Only a company that cand balance the social, ecological and economic consequences of its activities, can offer services to customers that are a sine qua non condition in achieving the financial ambitions they have and to create a stable and rewarding work environment.

Now let us take a look at the table below, containing One Group’s strategy on each segment and business line.

My own representation based on One Group Strategy

1.3 Values

Each employer should bear in mind that doing something that really has meaning (beside money) can bring a great satisfaction to the employees. Namely knowing that you are contributing at the transformation of the company for which you struggle every day, that you are about to create your own dream career and that, you are bringing something valuable for the society that surrounds you . Let’s go on this search together!

Earning money.

Can have a different and better meaning, when people are appreciated and treated with respect. We all enjoy going to work in a good and peaceful atmosphere.

Working for a dynamic employer

When your employer is leading the market, then you should be proud! The working place will also provide challenging and encouraging ambient.

Being able to design your own career

Such an employer can really have an important influence on your carreer. You keep grow when your manager offers proper training, education and other challenging experiences.

Doing good

Does your your work contributes to community? Ponder over it.

Diversity

Come as you are! We are all "United by diversity".

One Group promoted a new working environment for the banking – a place where everyone who shares the idea of reshaping the future, can come here to bring their ideas, make plans and act accordingly.

Organizational structure at a glance

The management board is responsible for managing the company, taking into consideration shareholders, employees and public interest. The board is in charge with developing the strategy, taking care of the right risk management and controlling and taking the right decisions.

Members of the management board are appointed by the supervisory board, who also decide on the remuneration, evaluating the activity annualy.

The supervisory board advises the management board regarding the business strategy. It takes part in making right and important decisions.

1.5 SWOT analysis at a glance

My own representation

1.6 Financial and operational highlights 2018

My own representation based on the figures for the comparative period 2014 restated according to IAS 8.

Highlights:

Best result in the Group history

Net result EUR 1,8 mln

Significant improvement in operating result of 8.9%

Net interest income rises up to 5.3%

Cost/income ratio 60%

Loan growth increases – Retail, once more, is a growth drive

Net loans increase – 7.0% (up to EUR 150bln)

Biggest registered growth – Austria, Czech Republic and Slovakia

Positive asset quality trend maintains

NPL ratio increases up to 3.1%

Continued acceleration across all main markets

Capitalisation – very good

CET 1 ratio increased to 13%

Good funding and liquidity

Increasing retail deposit in all core countries

Loan-to-deposit ratio is approx. 92%

1.7. Competition

In the past years, our local market in terms of banking has dramatically changed. The financial crisis came with strong challenges. Romanian financial institutions managed to survive and to overcome the crisis, as they have been all capitalized and solvable. Anyway, reaching a fair competition degree is almost impossible, since no one can actually measure it very accurate.

If we consider One Group at a global level, then we can consider IFFG the most important competitor. IFFG activates in the Mortgage Finance, with approx. 47,000 less employees than One Group.

According to the last year bank's financial reports, UniBank has the second place, with 96 bln EUR in Central and Eastern Europe. Raiffeisen Bank International owns the third position, with assets of 87 bln EUR.

On the Romanian market, the leader in terms of assets was still One Bank for the last year, with assets of 68 bln RON, and with a market share of 16%.

The main and most important competitors are as follows – Banca Transilvania, which operates within SME & Corporate and Retail, focusing especially on healthcare, agriculture, and EU. UniCredit Bank conquers the third place, and was established in Romania in 1991 Banca Tiriac. It provides a wide range of services to all segments, whether we discuss about individual and private, or SMEs and multinational corporates. The next place is taken by Raiffeisen Bank. Its business is pretty similar to UniCredit Bank, taking into consideration that it provides a comprehensive range of services to all segments mentioned above.

Chapter 2. Presentation of One Bank

One Bank, part of One Group, is the most important Romanian financial group, providing universal banking services including pensions, leasing, deposits, personal loans and mortgage loans, and also a full cash management service offering, by means of their numerous agencies and CCs (Corporate Centers). One Bank believes in the possibility of a growing prosperity in our country, and encourages its customers to aim for a better life.

In this respect, One Bank promotes the idea of banking for everybody and of long-term financial cadvisory, according to each customer’s preference. It is also the master of the most important financial education program in pour country, named “Scoala de Bani” or “The Money School”, with financial education courses not only for adults but for teenagers also, all these within a mobile exposition and a digital platform, involving more than 1,000 financial education teachers, which are One Bank employees.

One Bank is such a landmark brand in the mind of the Romanian consumer, that the feeling is that it has always been here; we are basically speaking of a brand synonymous with "home “, in Romania.

One Bank is the most valuable financial institution and brand in our country, and the main institution with which most clients are doing the banking. Not only that it offers a range of financial services in more than 50 business centres for corporates and 600 agencies located in the most important cities across the country (with more than 10.000 inhabitants), but it also provides a full range of products, customized for each segment. One Bank has also obtained the first place in the local market in terms of bank transactions and its customers have at handy the largest national network of ATMs (more than 2,000 ) and more than 15,000 POSs or card payment terminals to merchants. As of September 2018, One Bank Group had more than 7,200 employees al over the country.

2.1 Activity object and history

One Bank provides a full range of products for the population with more than 500 units in our country. The corporate clients are managed by means of the commercial centers (with a current number of 42 CCs), designed especially for taking care of legal entities. With a complex number of products that include not only Electrnic Banking and cards acquiring & e-commerce enabling MOTO transactions, but also financing of the local public authorities in infrastructure (both large and small cities), and financing for the implementation of EU programs, such as EBRD, SAPARD, PHARE or EU, and log term/short term investment loans and working capital for SMEs, trade finance, factoring, cash management and e-payment ( for instance, for local taxes).

One Bank is also the first financial institution in Romania that launched a national network of offices which are dedicated to EU funds exclusively, named “EU Office One Bank”. The CEO of One Bank is the main apostol of embracing the transformation, by finding the right path in order to create prosperity in our country and change. The transformation path is more a technologically one to follow at this moment and will not be a short one, because this is only the beginning.

2.2 Organizational chart of BCR Head office

My own representation based on organizational structure

2.3 Financial highlights

One Bank in 2018: supports our economy, by means of significant increase in SME and mortgage lending; by means of digital transformation with the launching of the first intelligent banking platform – George. The platform marks an important moment in the aimed result and it also renders the continuous efforts to its jouney to reshape the traditional customer experience.

One Bank provides a trustworthy financial planning to all of its customers. The Bank’s mortgage and cash loans were improved and adapted to market needs, leading to a total production of RON 6.3 billion last year. One Bank maintained its position as the most wanted financial institution for people who want to buy a house .It continued to be a strong pillar for the economy, energy, agriculture and IT. New approved credits to a legal entities in the third Q of 2018 amounted RON 4.5 billion (approx EUR 965 mln). The Bank focuses especially on generating new business for SMEs segment, the stock of loans reaching approx. RON 5 billion as of Q3 2018, which actually means a double growth.

In the first 9M 2018, One Bank recorded a net profit of over RON 1 billion, on the back of a strong operating result and a very importang performance on all business segments.

9M 2018 commercial & financial highlights

One Bank achieved a net profit of RON 1,015.2 million, taking into consideration business development and continuous improvement of the product and services portfolio.

My own representation based on Fact Sheet – One bank site

In retail banking business, One Bank generated a new volume of loans with over 46% increase in "Divers" cash loan and also an increase in sales of mortgage product “Casa mea” , compared to the last year, same period. More than 20% newly originated mortgage loans registered, validating the strong leading position in the market. Business sales also increased by 50% yoy supported by the its leading position in Start- Up Nation program. As a result of the successful strategy of supporting small entrepreneurs and increase in the leasing activity, Small and Medium-sized enterprises financing recorded a double digit increase, more than RON 5,2 billion of as of September 2018. In the total corporate banking business (large corporates, SMEs and public sector), One Bank approved new credits up to RON 4.5 billion.

In terms of corporate financing, One Bank is part of the main key sectors in our economy, such as energy , automotive, IT and even agriculture. Also, the co-financing of EU projects increased last year, One Bank having a significant market share and an important portfolio. The operating result also increased to RON 1.2 mln, approx. 14.0% higher than the previous year’s registered result. Net trading result increased by 16%.

The operating income increased by approx. 13%, don the back of the higher net interest income, better fee income and increasing net trading result.

On the other side, One Bank registered an increase in general administrative expenses which reached RON 1,2 mln, up by 11% in comparison to last year (same period) , mainly due to higher personnel costs and investments in new IT and business projects – such as George and CRM.

As such, cost-income ratio stood at approx 49% in Q3 2018, versus 50.3% in Q3 2017.

Risk costs & Asset Quality

Taking into consideration the important release of provisions in 2018, lower risk costs were registered this year, in comparison with the same period from the last year. NPL ratio2 at 7%, as of 30 September 2018 , reduced versus 10.5% as of September 2017.

Capital position and funding

Solvency ratio under IFRS of One Bank (standalone) as of August 2018 was much above the regulatory requirements of the National Bank of Romania, namely 21%. What is important to mention here is that One Bank benefits of continuing support of the Group it belongs to and it enjoys one of the strongest capital positions amids Romanian banks. There is no surprise that One Bank will maintain for sure the good solvency ratio, proving once more its acapacity to support the growth of lending in any of the business lines, Retail and/or Corporate. Loans and receivables to customers increased by 7.5% as of 30 September 2018, especially due to the important advance in retail segment (+12.4% ytd). Deposits were stable and liniar, with RON 52,600 mln as of 30 September 2018, versus RON 52,570 mln as of 31 December 2017, in the context of increasing trend in retail deposits, despite the decreasing one of the corporate deposits. But deposits still remain One Bank’s main funding source, altough it focuses on lending in RON, which becomes more and more predominant.

My own representation based on OneBank site

Chapter 3. Strategic Analysis

3.1 Diagnosis –Porter and SWOT

Diagnostic analysis has the role to identify the causes and the most nocive factors that can influence the well-being of the company. Looking at a company as an organism, the diagnosis involves the identification of the dysfunctionalities, the research and a deeper analysis and understanding process of the main factors. This is the foundation in order to create the strategy of the company and of the business. This method is not only used in difficult times, but also each time managers intend to evaluate the performance of the company in order to improve it. Diagnostic analysis offers important information to managers regarding its environment and helps them to anticipate and prevent the changes. The main frameworks for analyzing changing and complex environments are defined by Johnson in “Exploring Strategy’’, as per resume below:

Macro – environment is very representative for all the factors that may influence an organization. The method used to analyze economic, social, technological, ecological and legal environments is PESTEL. The information it provides can be used in creating best case or worst case scenarios in order to face the unforeseen.

Industry or sector. The used method is Michael Porter Five Forces framework which is focused on the competition within an industry. It gives an important overview of the profitability of the area.

Competitors and markets. This concept analysis gives information about the opportunities on the market called “Blue Ocean’’.

The layers of the business environment are rendered below.

Source: Johnson G -,,Exploring strategy’’(2013)

3.2 Porter’s Five Forces framework

The financial crisis from 2008 had a major impact if we think of the way in which banks run their business. Not only the financial situation has suffered a lot of changes, but the market as well ran into a transformation process. The measures taken involve not only the banking sector, but governments and central banks as well. Fortunately, in our country, the banking sector was stable and did not require bailouts.

At the end of 2018, the Romanian banking sector included 34 credit institutions, and 77% of the assets in Romania were owned by foreign capital institution, a decreasing trend compared to the end of 2016, with a percentage of 91%. Last year, on the back of favourable macroeconomic environment, very good results and a development pf the profitability ratio were obtained. The positive trend makes us optimistic.

Taking into consideration all of the above, the banking sector’s profitability has continued to increase, with a ROE of 15.7% in June 2018, compared to 12.9% in June 2017. ROA maintained its percentage of 1.6% in June 2018. It is important to here that profitability should not be analysed only at a specific moment in time, and that we should compare and analyse longer and different periods of time.

The method that I will describe below helps identifying how attractive is this industry in terms of the five forces: Threat of substitutes (of new entrants), Power of Suppliers, Power of Buyers, Threat of Entry and of course extent of rivalry, if we consider the competitors.

The intensity of the five forces gives an idea of a capability to obtain profits on analyzed market. If all the forces are high, the industry is not attractive to compete in.

The main characteristics of Romanian banking market, using Porter’s five forces model, are:

Threat of New Entrants – which is High,

As It requires high initial investments.

At this moment, one of the stronger barriers is legislation, in most countries. Governements have the final decision in accepting or rejecting the opening of a new bank. If there are no barriers in terms of licenses, regulation or law for instance, the new competitors can join the existing market without suffering the pain of the traditional and bureaucratic process of setting a new bank.

Power of Suppliers – Moderate.

The core business of the financial banking industry is product portfolio and service. For sure the suppliers are the main providers of some tangible assets (for instance, furniture), but their impact on the core business is not that relevant and of high importance, because they are not providing the raw material.

Power of Buyers/Customers – High

High competition, CRM, Personal banking, deposits, secured and mortgage loans, etc.

This is a very sensitive one, as customers can move very easily from one bank to another, deciding to switch to other provider if a financial institution is not fully – fledged. And they take into consideration mostly the power of services and of portfolio products. Nowadays, they even take into consideration neo-banks and fintechs.

Availability of Substitutes – Moderate

In the current context, the battle is held on the technological evolution of the business, which aims to become data driven and to use big data instead, all these in order to reduce operational costs and to deliver higher services, digital products and higher performace that will finally lead to an increased turnover. Biggest theats come from non-financial segments, not from rival banks.

Competitive Rivalry – HIGH.

Digital Assistant, Remote KYC & onboarding, life insurance, NFC or free transactions at ATM, moreover – free credit and debit card or doorstep delivery and digitally and paperless way of opening new account with a debit card bundle.

Current market competition between big players is a taught one. Not only that there are too many players on the market, but their strategies do not differ much from one to another. Almost no differentiation in the product characteristics, and even in the pricing method. Competition in the Romanian banking system is due because of the strong presence of foreign banks. The conclusion is that, as per Porter’s Forces Model, most of the forces are scored high, hence the environment is unfavourabl and the domain is not very attractive, at least at this moment.

3.3 SWOT analysis

The SWOT analysis below provides a general image of the strengths, weaknesses, opportunities and threats and it is useful for creating strategies and assessment of future decisions. One Bank has not only a leading position in the country by means of its diversified services and products, but also by means of fostering the digital transformation (George and CRM launching), online account opening and recent innovix program for the beginner antrepreneurs. Despite all these, One Bank has faced numerous attacks, especially on the informational system. Moreover, One Bank faces a strong icompetition in a context which is not favourable from an economical point of view at this moment. The good news is that One Bank has registered an important increase in SME & secured mortgage lending.

My own representation

One Bank relies on its current customer data base, but it has to be aware that clients can easily switch to other cheaper banks, if they do not take into consideration the annually negotiation of the current pricing offers and quotations, especially those in place for the most important customers.

Strengths

Strong and leading position in the country

Market knowledge and expertise

Well segmented and diversified client portfolio

Diversified banking services

Extended correspondent banking network

Numerous inovative ideas of the staff which are put into practice

Digital transformation with the deployment of the first intelligent banking platform

Weaknesses

Numerous attacks on the informational system

Vulnerability of the inside information

Reliant on its customers, they can switch for cheaper banks

Opportunities

Growing economy and demand

New potential market expansion

Market diversification

Continuous support to the local economy (significant growth in SME and secured lending, especially mortgage).

Threats

The entrance of new banking institutions

Stronger interbanking competition

Economic context of the country not currently favourable

Change of expectations and needs of both existing and potential consumers

Chapter 4 –The beginning. CRM at group level and CRM ROMANIA

4.1 The Story – From Babel to CRM

My experience covers a wide area of responsibilities. I have over 13 years of experience working in banking within different departments, especially in customer service, sales and portfolio management.What I have learned these years is that the acquisition of a customer is only the very first step in a very extended journey, for both customer and company.

The golden rule for a successful customer relationship is GET, KEEP, GROW. But how can we do that, if we do not have a system that help us centralize all the necessary information regarding a potential or an existing client? Today, digital transformation allows us to connect with customers in so many different ways.

When working as a Relationship Manager for Cash Management in UniBank, I was given the opportunity to participate in Babel application roll-out, that I will describe in the following chapter. It was not an usual CRM and I was selected from my department not only to test the tool, but also to participate in CST meetings as a representative of my department, where all the product factories gathered in a meeting room in order to discuss the clients with big revenue potential and to create a strategy to increase, together with the direct Relationship Manager of the respective account.

In this way, the generation of the new ideas and the knowledge-share was a real success, and all these meetings were followed by a Deal Team Application where we put our plan and opinion, presenting them in the credit committee, being approved by the VP.

Having the experience described above, I joined One Bank company as a CRM Manager. I had the product, the sales, the training and the support knowledge, as CRM is actually is an integration of functions and activities of Sales, Product knowledge, Training and Support into a new profession, taken at the next level. In the first stage of the project implementation, my main responsibility was to gather, analyze, and validate the business needs of project stakeholders – not only the users, but also management – and to compile user requirements in order to convey a high-level solution.

After the go-live of the project, I was in charge with the adoption of the 1200 users, together with the training company selected to provide trainings in the network. It was not an easy journey as I have started from creating mock-ups in the xls for the product features, so I had a long and very often a challenging way to go, that I will convey in the following chapters.

Can be Babel considered a CRM system?

Not quite, now that I have an experience with a real oCRM system. But It can be defined an IT tool for the sales force that has been developed with the support of internal solutions.

Its key characteristics:

Granular, comprehensive C360 source

Information sharing enabler

User friendly journey

Scalable platform through continuous development.

Babel has been developed and has undergone a series of improvements during time. The Account Planning and Pricing approach project had a strong commitment of all CEE division (over 180 resources involved across the Group). Exectution is based on a fruitful cooperation among all stakeholders leading to continuous improvement.

Key success factors:

Involved stakeholders coming from different areas/background

Idea generation based on continuous interaction among all involved stakeholders and constant feeding of innovation

IT development following an agile approach…

…leading to continuous improvements based on Central and Local users feedback!

I will further describe the CEE 2020 – Account Planning and Pricing Approach.

Project objective:

Within the CEE 2020 plan, one key strategic objective is to improve value creation by fostering revenue boost in CEE UniGroup.

Key elements:

Structured commercial approach being introduced across selected CEE countries and based on:

Client value and potential assessment

Ad Hoc client strategy and opportunity identification

Profitability driven account planning and negotiation

Performance review

…supported by new integrated commercial front-end (Babel tool)

Included countries and related status:

Wave 1 : Hungary, Russia

Wave 2 : Bulgaria, Czech Republic/Slovakia

Wave 3 : Croatia, Romania

The approach was defined as fruitful cooperation among all stakeholders coming from different functions/backgrounds. Delivering the Account Planning and Pricing approach model requires substantial transformation of the Unigroup commercial process supported by a new and innovative IT solution – Babel.

So let us take a look at each commercial process and the related transformation required and then we should be able to answer the question Why Babel is not a real oCRM system.

Client value:

Definition of value creation as optimization metric within UniGroup portfolio

Assessment of current and potential value creation by client through cluster benchmarking and target SoW definition (aligned with CRO)

Client strategy and prioritization:

Explicit client strategy driven by current and potential value creation for current clients

Prioritization of clients within RM’s portfolios based on value creation

Opportunity identification:

Opportunity identification for all clients through cluster benchmarking on key profitability and value creation drivers

Structured account planning process differentiated by client type, facilitated by potential calculation and cluster benchmarking

Pricing and negotiation :

Client profitability driven negotiation process, with explicit guidance from benckmarking reference pricing and value creation simulations

Value driven deals approval forms, seamlessly integrated into negotiation, to support approval process

Performance dialogue :

Top down and bottom up target setting approach based on identified opportunities for all aclients

Structured performance review meetings at each level, to systematically discuss result vs. target and plan next commercial cycle, properly supported by value creation oriented managerial reports driving the review.

Client potential is based on a value-based metric combining the concept of house bank with a realistic level of sales performance. Potential defined at client level is realized according to a value-based metric, combining the concept of house bank with a realistic level of sales performance.

Then the importance of the following question arise: how do I manage to capture client potential? We have to understand first the current concept and the new concepts, in order to answer the question.

Current potential is captured if I manage to…

… Finance its entire debt – up to the point that my CRO would allow.

New concept: SoW max, meaning the maximum Share of Wallet.

…capture the fee business (up to a realistic level in line with the share of lending business)

New concept: Clustering of clients and development of benchmark (based on internal benchmark of similar clients with highest performance in term of overall value creation)

…and price both at the same level as the bank’s best comparable clients (from a value creation standpoint)

New concept: Clustering of clients and development of benchmark for

Cross selling

Pricing

Value creation

The starting point for the application of the new approach is the definition of client clusters based on five dimensions, regarding client willingness to accept price.

Client negotiation power

Size/Turnover. Rationale: deal size drives pricing – banks may be willing to forgo margin in order to gain in volume. There are five main industries: Domestic, International, Financial Institutions, Government, Real estate.

Risk rating. Rationale: highly rated companies have more financing options, hence more leverage in pricing negotiations.

The last mentioned elements are based on client needs:

Geography. Rationale: Pricing may be driven by local competitive conditions

Segments. Rationale: Product requirements

Industry. Rationale: Prevailing business practices.

Each driver should be analyzed verifying of it has relevant impact on client KPIs (on SEVA/turnover, loan margin, loan penetration, CSE). Drivers identified as statistically relevant should then be discussed with local management to agree on set to be used.

Cluster size has to be large enough to allow benchmarking.

Methodology for cluster definition: the starting point for the application of the new model is the definition of client clusters based on relevant dimensions for banking behavior, negotiation power and needs:

Segment as differentiates product requirements

Size/turnover as deal size influence pricing

Risk/Rating as highly rated companies have more financing options

Industry as differentiates product requirements and business practices

Geography as local competition influences pricing

The client clusters needs then to be fine tuned and validated:

Qualitatively by assessing the comparability of cutomers within clusters through the business judgement of RM’s,

Quantitatively through analyses of statistical relevance (e.g. size, variability) of customers belonging to the same cluster.

Please see below the outcome of cluster definition – Hungary example

Source: UniBank Hungary Division, CEE 2020 Pricing and Account planning team analysis

Legend: High = from 1 to 4 – , standard = below 4 – (similarity to Risk policy investment grade) 2 HO industry classifications aggregated

Within each cluster a reference population is selected in order to define key benchmark metrics

Source: CEE 2020 Pricing and Account planning team analysis

Strategic direction by client is clearly defined based on current and potential sEVA as well as RACE. What we see below is a clear strategic direction based on capital light priorities such as:

Customer position vis-à-vis group of peers,

Bank priorities regarding capital return (e.g. RACE = 3%),

Risk appetite by sector and customer risk rating.

It also includes clients without cash lending potential and clients with cash lending potential but potential RACE below threshold. Potential RACE threshold to be specified for the respective country (e.g. RACE = 3%).

So, Account planning and pricing approach in CIB envisages the adoption of a structured commercial approach supported by a new tool, in order to improve value creation in overall Corporate banking business by fostering revenue boost.

Babel allows systematic opportunity identification at client level, smart client targeting based on potential and smart use of pricing to boost overall pricing creation.

But novelty here is that product needs of highest potential clients are discussed by RMs and product specialists in client service team meetings.

Objectives of the CST

Forum to discuss the clients with the highest banking revenue potential, agree on a strategy for the account, and prepare the account plan

Generation of new ideas, knowledge-sharing

Dedication toward the execution of the jointly accepted plans

Participants and tasks:

Team Leader

Coordinates the discussion;

Makes sure that the objectives of the workshop are fulfilled

Relationship Manager

Shortly presents the client’s

Market position

Banking revenue

Product needs

Takes notes about the ideas generated at the workshop

Answers the product specialists’ questions about the client

Takes part in the joint idea-generation

Product specialists

Discuss the potential product needs mentioned by the RM and suggest new ideas

Agree with the RM on the highest-priority client needs, on the tasks, and on their timing related to the sales process

Credit analysts (CRO)

Gives direction on the desired exposure level

In some cases, approves ex-ante the credit strategy.

Regional/Segment Manager

Verifies feasibility of ideas

Generates further ideas

New negotiation and pricing logic aims ato maximize client value creation. Understand client potential for value creation, meaning reviewing the current client situation (profitability, pricing levels,priority/direction), assess potential (by benchmark comparison, reference pricing, identified opportunities, discussion with client), also developing strategy to capture value (identify products to address client needs and develop detailed action plan to achieve identified strategy) are very important in an extended journey that a rel manager begins when acquiring the client.

After these meetings, all the new ideas regarind the growth of revenues were captured in Deal Teams applications, that accompanied the clients in Credit Committees in order to sstain the credit application and to be approved by the VP. I rendered a schematic flow below for a better understanding of the Deal Team applications.

My own representation

Coming back to pricing approach, executing strategy using pricing as key lever is also a very important aspect, such as: develop and discuss proposal for client based on identified actions and needs, using pricing negotiation lever to capture maximum value out of the entire client discussuin. Leverage advances pricing toold as an enabler for strategy execution with client.

Also, a performance management comprises target setting and continuous performance dialogues, as described below:

Target setting description.

Structured process to set, update and review targets both at overall portfolio level and at individual client level

Current target setting process is enhanced by deriving top down and bottom up targets from client strategy/potential and individual opportunity setting

Performance dialogue description.

Comprehensive performance dialogue structured around regular meetings and interactions to review progresses, discuss results, plan new activities and appraise performance

Performance dialogues to be fully aligned with new target model in terms of KPIs and new value creation vocabulary, properly facilitated by enhanced tools.

The purpose of the Pilar was to test tool and approach as well as to set the ground for full roll-out in UniBank. The key elements were:

Test and refine approach.

Introduce the approach to the network and use the tool to test it within the different segments of UniBank CIB.

Assess tools results in terms of client potential and understanding whether fine tunnings are needed (e g clustering logic, Max SoW)

Test Babel Tool.

Test tool features and functionalities as well as receive feedback on their applicability/usability for the account planning process

Collect insights/feedbacks from RMs involved in order to improve the tool going forward

Set the ground for Roll-out.

Identify all potential data quality/availability issue that may affect Babel outcome and tackle them directly in source systems (e gRWA corrections, industry information, etc.)

Collect hints for Roll-out deployment and create a core of coaches at local level who will support and accelerate roll-out activities.

4.2 CRM in local market and Competition – The Ultimate Battle

My own representation

Maybe Microsoft Dynamics? Or Salesforce? No, better Siebel? The world is full of important providers in the area. Maybe these don’t have an influence on our every day lifes. But the program the companies choose to implement in order to run their business can track for sure a better conversion rate.

Probably the most agressive competition in CRM offering is held between Microsoft Dynamics and Salesforce. Both are leading CRM providers and one will find very difficult to differentiate their solution and to decide which one to use. Because they are quite similar in pricing and digital journeys, they are fighting against each other since ever.

I will briefly point out the CRM usage of the main competitors of One Bank, in the following presentation, as per my personal experience and research.

Raiffeisen Bank.

Raiffeisen Bank relies on Oracle CRM, which is actually an analytical CRM, embedding reporting BI and powerful analytics in order to track KPI and overall business performance.

C360 information can be accessed from any preferred device – tablet, smartphone, PC. It helps the fron office teams to concentrate more on the selling process, and not on searching for information.

At this moment, only the staff working in Branches introduce data about the client. No data is introduced by the corporate Sales Force, therefore the existing information and the customer 360 profile is not complete.

– BRD – Group Société Générale

BRD uses Salesforce application. Salesforce is for sure the most popular software option in CRM area, used by thousands of companies globally. Microsoft Dynamics, on the other hand, is a best fit for the businesses are a integrated MS services. Both softwares aim to be an a fully-fledged solution for the companies. After all, deciding which the best to use is will eventually come down to personal taste and needs.

The two giants are important CRM brands. But one of the strongest asset of Dynamics 365 is the ease when coming to platform integration with other Microsoft software.

ING Bank

ING Bank uses Sharepoint, a CRM option for documents tracking. A document platform, more than a pipeline genenerator. SharePoint is a platform web-based, integrated with MS Office. Sharepoint was launched in 2001 and it is more a storage and a DMS system.

We can notice a very basic menu on the left side of the screen (picture below), where a front officer can add any contact information and can upload relevand documents for a certain company.

Of course, it can be customized with extra add-ins and extra pricing, in order to configure dashboards and pipeline management. Sharepoint can be also created as a reporting tool, if necessary.

Most likely, no CRM Software will be perfect in bringing together in a single place all the needs of a business. While features of MS 365 CRM and Oracle CRM are obviously the leaders when coming to best platform offering CRM, one should analyze with attention the integration part and enabler provided by each of them. A seamless exchange of information is very important, in order to reduce time wasted on information migration from legacy systems to main platform.

Top 3 CRM applications – Microsoft Dynamics 365, Oracle CRM and Salesforce CRM

Key features of Microsoft Dynamics CRM

Email integrations

Power BI Dashboards

PM

Solution management

Assets and Liability opportunity management

Workflow management

Campaigns

Sales tracking

Lead generation and conversion

History of Activities and Interaction tracking

Call Center and Leasing Management

Key features of Oracle CRM

Sales Dashboards

Customer Support

Content and Campaign Orchestration

Digital Marketing

Supplier purchase & order management

Content Management

Preferred device app – Mobile responsive

Interaction tracking

Call Center Management

Our decision was based on what business systems we already have in place, what features our teams can use to excel, and how much are we willing to spend. What we took into consideration when deciding to work with Microsoft Dynamics and not with Salesforce are –

Flexibility in terms of code usage. MS Dynamics employs .NET, Java and HTML. Salesforce uses its own programming language, namely Apex.

Costs. Extra modules added in Salesforce are too expensive, while Microsoft offers a fully-fledged solution with embedded accelerators. The storage costs are also higher within Salesforce.

Highly customizable system, due to the programming languages that can be used, listed below. Cusomization with Apex within Salesfoce is almost impossible. MS CRM can be named a development platform and this is its main advantage.

Outlook integration and other MS Technologies

Options in terms of deployment. MS Dynamics can be deployed on private, SaaS, on premise or private/public cloud Azure. Salesforce allows deployment on-demand only, within a multi tenant hosting, which can be a real deal-breaker.

4.2 CRM in One Group

The group retail strategy has a strong focus on rethinking customer experience and on innovation which will finally lead to retail business development.

Customer centricity became a major success factor of all the development initiatives. Digital innovation is focusing to offer the best client experience. Beside George, CRM is also becoming a key element in OneBank culture.

Thanks to the new Microsoft Dynamics CRM software, the segment of Private banking relationships with clients on a professional level. This innovation brings a C720 view of the customer and on top of that, it improves the relationship with the customers.

Initial Situation

Before the implementation of the CRM system, the private banking segment did not have an integration system in order to communicate or to gather and to storage information. Important documents and leads were distributed by various silos, even by emails, lost in transition. There were no connected communication tools.

Client data was recorded in Excel files, which led to delays in important decisions. In order to keep the pace with the market trends and to improve as soon as possible the current situation, the management decided to implement a new solution. A CRM system.

Project Objectives

In order to increase speed in servicing the customer in the area of private banking, One Group started implemented a modern CRM system. The main objectives of the projects were:

Having an integrated system with client data in one place;

increased productivity of private sector, bringing more focus on selling process;

enabling a better business communication;

quality increase in customer service;

easy management of daily activities;

Anytime access to important data.

Solution Description

The CRM solution for the private banking area is based on the Microsoft Dynamics CRM platform integrated with other existing bank systems. Thanks to the 360-degree view of a client, the private bankers have a better overview of customer portfolio. They can prepare better for a meeting. The solution was implemented by the agile methodology and could be accessed from any device. The CRM system is used not only by private sales officers, but also support and back-office teams.

The significant benefits of the application are:

The solution provides the 360-degree and 720 degree – view of client information. The

The solution is available anytime and anywhere, being mobile-responsive.

Bringing together related business processes in the private banking area.

Access to data irectly from email, by means of easily integration with Outlook.

Notifications for meetings and other upcoming revisions , expiration dates and even on segment change.

Integration with internal legacy system.

Storage of data.

Activities and client interaction history recording.

Usage of embedded marketing tools.

Technologies used:

But let s take a look at oCRM for Corporates and Micro, now, at Group level.

Who uses oCRM?

There are only 50 users for the CRM application.

My own representation

Which are the main features of the group application?

My own representation

Which are the main stages for Opportunity Management for both lending and non-lending processes?

My own representation

We took the CRM model implemented at One Group Vienna and we decided to go further and to customize it depending on users’ requests. I have made rendered above some figures regarding the main features in place at the group at this moment, just to discuss further about the extra features added by us in the creation of Operation CRM in Romania in the comparison I am going to deliver in the following chapters.

As I already mentioned, we considered the model of the CRM implemented in Vienna as the basis for creating our own and personalized application, and we developed and improved it. Other countries will take out complete and exhaustive CRM model in order to implement it.

Chapter 5. Operational CRM & Front End Integration for Corporates and Micro at One Bank

5.1 o.CRM – a One Bank innovation

Operational CRM is a One Bank innovation, as the application is highly customized and is being continuously improved based on users’ feedback and improvement suggestions.

We also have to take into consideration that the implementation of a new Customer Relationship Management system involves important changes in the bank's IT system (through the implementation of new CRM IT applications), and also in the organizational structure.

The only thing certain about the future of business is the unforseen. Companies have to adapt to it. Adopting innovations rapidly is very important in order to foster better relationships with customers by providing different services and journeys.

It is not a surprise anymore that the responsibilities of a banking employee are changing. Besides a very good knowledge of the current portfolio, or the ability to interact and understand business, a company needs more than ever an easily access to data and information, ans also discipline and transparation, collaboration and organization.

5.2. What does CRM offer to its users?

Source – interface I have created for the application, using shutterstock images for each module

On a short term, CRM is a tool created for the sales force, for and along with the colleagues from sales to support in order to simplify the business. As a final destination, it aims to become the only interface a Relationship Manager uses in its activity, from which all the customer information can be accessed or managing easily. In order to better understand the impact, I render a comparison As is vs To be, on each functionality.

Operational CRM supports all four One Bank’s strategic pillars: financial dimension, Internal dimension, Customer dimension and People dimension.

My own representation

The business processes covered by the application are: identification, activity management, acquisition/prospecting, opportunity management, reporting and monitoring (after sales), as described below.

My own representation

The major impact, as stated above, will be in sales activities. The general drivers for increase, are comprised below.

My own representation

At the beginning of 2017, we started to work waterfall. But one year later, we switched to agile delivery, meaning that business analysis, technical analysis, development and testing took place in parallel.The landscape was very complex and there was a big challenge to make it happen.

My own representation

Where is my place in the organization and in the project? I am part of the business team in the schema below:

My own representation

…and more: no more activity based on reports and xls files! Now, I can have a successful daily management of activities, and I can access reporting tools in my dashboard for all activity, such as meetings, opportunities, tasks, phone calls, prolongations, pipeline, etc.

But which is the impact in my sales activities?

START STOP

My own representation

As is vs To be

My own representation

Main modules of o.CRM

My own representation

Customer 360 module: this module provides an overview of companies, prospective clients and current clients, with information related to Header – CIC, CUI, Segment & Subsegment, to Relationship Manager & Client Team, to Profile – Client Identification, Risk Group, Addresses, Compliance, Documents and also an overview of Product Portfolio and Limits – Client Portfolio, Leasing , Assets, Liabilities, Cards Acquiring, Salaries, etc.

Activities module: this module contains the main types of interactions in the sales process with the customer

Opportunities module: this module captures the main types of opportunities as well as the collaboration in their progress. An opportunity management module that helps you to track conversion and revive the dormant clients. A pricing module is also embedded in order to use the system for approvals and pricing discounts based on each competence level.

One Bank main stages for Opportunity management are lending and non – lending.

Processes module: processes in the bank that are currently being done through paper or via email, such as allocations, prospects and customers reallocation, delegate sales activities in case of leave, leads.

Dashboard module: is the way we have a centralized image of portfolio and sales activities, including opportunities.

Main screen when looking for a client and the way we organized the information.

5.3 Adoption and engagement stream

But what technique could possibly work better when it comes to final user? How can we convince people to use the application? Nearly 75% of all CRM projects fail. The reason isn’t software, but poor adoption. This is the most important part in launching an application. Users have to adopt it in order for the project to be a successful one.

We first created the way we will communicate the features of the applications in the trainings.

My own representation

Then, we started to create a story. Let hear that story!

Let’s make the CRM battle part of your DN for descendands to follow!

Research. We thought of making the One Bank kingdom a better place, so we wnt through the wars and battles we ught to carry and decided to consider several battlefields to come.

Idea As it all starts and ends with the client, what better place to conquer that the CRM area?

Design. We put our best minds to it and together with industry experts, we started the battle with the architecture design for the best suitable CRM solution.

Development. Day and night we worked out our way through the depths of the CRM, forging steel pillars, slaying defects and welding it all into the desired functionalities.

Team. The time has come to prove their dedication, knowledge and bravery in testing the strength of the CRM application.

Marketing. Messengers will be spread across the seven seas, to gather warriors under the coat of arms that will be recognized by all who pass the CRM field.

Launch. The tournament thus begins, with kings and knights, leaving no man behind in the battle on the CRM field.

o.CRM Application Overview in a Storytelling

My own representation

Testimonials of happy clients

My own representation

5.4 Where are we now?

At this moment, the teams involved in the project focused on implementing the improvement requests of the user, collected after the first go-live, in parallel with the maintainance and technical support for the users.

Starting next year -2020- the project teams will be involved again in launching phase 2 of the application, integrating it with other internal systems.

Chapter 6 – Conclusions and recommendations

What did I earn, beside a beautiful merit diploma from our VP?

I may say that now I might have an idea about how to implement a successfully project. However, there is no ultimate recipe. Despite the hard work, we also need a professional team, a skilled Project Manager, and enormous eagerness to meet all the client’s requirements.

And my recommendation for the future development of the projects, are as follows:

Ensure top-management buy-in

Replace the existing PM

Set up internal usage guidelines

Define a CRM strategy and adopt a CRM philosophy

Account Management Automation

Digital product automation and risk assessement automation

Cognitive Automation (Face, liveness, video)

Our mission is to change the way people experience and engage with financial technology by putting automation and personalization at the heart of innovation. To transform the digital customer experience quickly and affordably.

New markets. New clients. New dreams. An entire end-to-end sales process should be automated. An end-to-end digital transformation is required. Anyone should have access to experience highly personalized digital journeys by using the digital touchpoint of their choice – website, mobile, tablet, API, IoT, chatbot, portal and more. Intelligent automation processors should be used to streamline every process in a financial business. From engagement and communication to risk underwriting, core business and customer care. Banks can differentiate by creating next generation, digital products and services that are highly contextualized. Leveraging the power of data, open API and a custom 360 view. In today digital and increasingly AI era, data stands out as the vital new core of a financial institution. Data integrates information across all layers and provides a powerful foundation for extension, evolution and even revolution. Previously complex process like frictionless biometric can happen anywhere in minutes. Hyper-personalisation at higher speed is now a reality.

I believe easy access to finance is as essential as electricity, water and education. It is essensial for all our lives to prosper. Creating highly personalized financial solutions can make an unimagined difference to everybody, everywhere. From disruptors, entrepreneurs and start-ups, to traditional players and governments.

Today’s customers are more demanding than ever, with expectations shaped by their own technology skills and awareness, fierce competitors or digital champions. Meanwhile, fragmented data, outdated systems and organizational silos, generate massive frictions in the customer journeys. The battle for the future is, essentially, a battle for customer experience.

For us, financial technology is freedom.

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